Iceland on a Budget – It Can Be Done!

Out of vacation days? Want to take a long weekend away? Iceland is the perfect spot for those on the East Coast and western Europe looking to get away and not kill their PTO.

Þingvellir National Park

Fares to Iceland have been crazy cheap lately, thanks to low-cost airlines like Wow and IcelandAir. While a flight to Iceland may run you only $300 from the east coast or Western Europe (or less!), Iceland itself is NOT a cheap destination. It’s the most expensive place I’ve ever been to, and that includes my trips to London.

A few of the costs I ran into on my trip were:

A pint of beer in a bar: $13 USD

A room at the Hilton Reykjavik : $300+ USD/night in May

A bowl of soup and a cup of hot tea at the Gulfoss Falls: $20

Ugliest hat I ever had to buy due to being colder than I thought?: $24

Cocktails in a bar: $18 USD

(Iceland uses the Icelandic Krona, but prices have been adjusted to USD for clarity.)

I heard Iceland was expensive before I went, but coming from NYC, I didn’t think it would be that bad. Boy was I wrong! But you don’t have to blow your budget like I did – you can learn from my mistakes! Here’s ways to cut costs in Iceland and still have a blast.

Iceland on a Budget

Hallgrímskirkja church in Reykjavik

Lodging – Where to Stay that Won’t Break The Bank

As mentioned above, my preferred hotel chain, Hilton, was straight tripping with the $300-400/night rate over Memorial Day weekend. Yes it’s an American holiday, but normally you can circumvent high rates by booking way in advance. I started planning in January and still couldn’t find a reasonably priced accommodation I felt comfortable with. I don’t always have to stay in luxury accommodations, but as someone who works hard and often long hours (9-5 is really just a metaphor on the blog!), I like to be able to relax as much as possible on vacation.

I decided to try my hand at another hostel stay and picked the Loft Hostel. I couldn’t be happier. The Loft Hostel is a very inviting and completely changed my mind about staying in hostels. I picked a 6 woman dorm room, which came to about $77/night, which included breakfast.

Dorm room at Loft HostelLoft Hostel lobby

The Loft Hostel was not only clean, but it was a great place to hang out. There’s a rooftop bar and a common room where they often have trivia night or musical acts. Wishing you had cheap drinks? There’s even a happy hour!

Loft Hostel Bar

What shocked me the most about the Loft Hostel was the diversity of the guests. There were teenagers, young professionals, families (some even with babies!) and mature solo travelers. Not only was the Loft Hostel a hang out for travelers, but I also met lots of Icelanders, swinging by to hang at the bar or catch the performance of the night. The social activities shut down around 11pm so your quality of sleep won’t be interrupted!

Common room at Loft Hostel

If the Loft Hostel isn’t your thing, I’ve also heard great things about Hlemmur Square Hostel and their accompanying hotel. I decided not to stay in an Airbnb for this trip, and I think that was a great decision. Many people I spoke with on my trip were in Airbnbs and were shocked by how small or dark the apartments were in person. If you decide to do so, please do your due diligence!

Restaurants – Cheap Eats Around Town

After paying $20 for a lunch meal (that left me still quite hungry), I had to seriously re-evaluate my spending budget. I roamed around town to see what I could eat that wouldn’t have me scrounging for change at the end of my trip.

A basic hot dog with a drink will run you about $6 USD. I got the Bacon Dog and soda (decided to do it the Icelandic way!) and it only costs me $11 USD. While I was there, I met 3 other Americans also on vacation – we commiserated over our budgetary woes in Iceland. 🙂 There’s a more famous hot dog stand that former US President Bill Clinton amongst other notable figures have eaten, Bæjarins Beztu Pylsur. Check it out and compare your meals!

Whenever I’m traveling and I need cheap food, I tend to turn to Asian cuisine. This time, they did not let me down. I heard good reviews about The Noodle Station. At Noodle Station, they only sell bowls of noodles – you pick whether you want chicken, beef or vegetarian. I got vegetarian which only came to about $8 USD.

My meal from The Noodle Station – DELICIOUS!

They have two locations and the one I went to was PACKED – it’s a very popular place. My food was delicious and noodles really hit the spot in the frigid temps in Iceland.

Other food tips to save money:

Bring a reusable water bottle. Iceland’s tap water is amazing and bottled water here can run you about $3.00 a bottle.

Pack snacks prior to your trip. I packed a few things for whenever I felt peckish – it helped, especially when I saw the grocery store prices for snacks.

If you’d like to drink for cheap, the Loft Hostel has happy hour almost everyday. One night, they offered free “Gin & Grape”. It wasn’t very good to me, but others seemed to love it.

Gin & Grape – try it if you dare!

Tours and Entertainment

The biggest part of my Iceland budget went to tours. Iceland is a beautiful country and there’s no shortage of tours to help you see the best the island has to offer.

I highly recommend both of the tours. As you can see from the Viator page that I booked them through, they’re not exactly cheap tours. Here’s a more in-depth look at each tour and if they were worth it.

Golden Circle Tour

Panoramic view of Þingvellir National Park

The Golden Circle refers to a popular route in Iceland that is rife with waterfalls, volcanoes and geysers. It was a long, cold day but all the sites were beautiful. Þingvellir National Park is one of the places you’d see on the tour, and it is a UNESCO World Heritage site.

Gulfoss Waterfall

Iceland has many, MANY waterfalls and Gulfoss is one of the featured ones on the tour. In addition to seeing Gulfoss, you’ll see many hot springs and a geyser! The geysers are located in Haukadalur – with the biggest ones named Geysir and Strokkur. Strokkur erupts more frequently than Geysir, about every 6-10 mins.

The geyser, GeysirStrokkur erupting – I had to wait several cycles to get this pic!

The Golden Circle Tour will amaze you with the natural beauty of Iceland – honestly, I’d never seen anything like this.

Geyser rules!

The Golden Circle is also drivable – a lot of people opt to rent a car and do it alone. Just be careful and don’t speed! Iceland has very remote areas so you don’t want to end up with car trouble or in an accident. Also, I know people who have received speeding tickets in the mail after their trip, in an upwards of $200 USD per ticket!

Game of Thrones Filming Locations Tour

If you’re a big Game of Thrones fan, then this tour is one you should DEFINITELY take.

Much of Season 4 of Game of Thrones was filmed in Iceland – including where Arya and The Hound did their road trip. The guide had an iPad and showed us various scenes before we saw the filming location, to jog our memory.

Brienne and The Hound fighting, at the same location as the pic above

Recreating Arya hiding from Brienne – how did I do?

We also saw Icelandic turf houses – the site where the Wildlings destroyed Ollie’s town. This was one of my favorite places – the houses were so unique and reminded me of one of my favorite movies – Lord of the Rings.

Icelandic turf houses – so cool!

The best part of the tour was the end – as I mentioned before, Iceland has tons of waterfalls, each one more beautiful than the next. The place pictured below was the site where Arya practiced her “water dancing” with her sword Needle.

I may look cold, but the view was worth it!

How to Save Money on Tours

Viator often has discount codes – Google for discount codes before purchasing.

Don’t buy the first time you shop. If you go to Viator and put tours in your cart, walk away from it. In the next few days, you’ll get an email from Viator asking you to return and giving you a discount to book the tours.

I ended up not paying the listed prices for the tour – I got them both for at least $20 under the current asking price. It pays to be patient!

The Blue Lagoon and More

Blue Lagoon

The Blue Lagoon is one of the top tourist attractions in Iceland – and like most things in Iceland, it does not come cheap. I decided to splurge a bit and pay for “comfort entrance”, which includes a towel, robe, algae mask and silica mud mask and free drink. For all those comforts, I paid approximately 65 euros.

The Blue Lagoon

The Blue Lagoon

The Blue Lagoon

After reading “What I Was Doing While You Were Breeding”, I decided to do the in-water massage at the lagoon. In the book, the author mentions that it was one of her TOP experiences in all of her travels. While I enjoyed being rubbed down under water by a large Icelandic man, the touch was a little too light for me. For this pleasure, I paid 83 euros.

Blue Lagoon

While my Blue Lagoon experience was a good one, there are ways to get the experience for much cheaper. You can enter the Blue Lagoon for 40 euros, with the basic package. You won’t get a towel or a robe, but you get a silica mud mask.

How the Blue Lagoon actually looks – people everywhere!

You can also skip the Blue Lagoon experience entirely and see the other lagoons in Iceland. These are often free or much cheaper to enter – and you don’t have to worry about feeling crowded. Check out this list of geothermal springs in Iceland – including free ones – from Sherman’s Travel.

I hope this helps! I enjoyed Iceland and would love to go back someday. It’s a beautiful place and the people are extremely friendly. There’s no reason to do a city tour in Iceland – Reykjavik is a small city and it’s easy to do a tour on your own.